"While I'm still firmly convinced the majority of the cuts will be in HPES, PSG may actually overtake them," says an employee, who works at HPES. "The mood amongst individual performers is while there are some folks that are greatly concerned, those folks are predominately in the US, and fear their jobs being either eliminated or moved to a lower cost region, such as Asia. Employees haven't been happy with the senior level leadership in many years now. I suppose it's hard to find happiness in losing your job so a CXO gets a multi-million dollar bonus or stock grant."

In March, HP announced that it was combining its PC and printer groups. HP surprised the Street with its earnings last week. The news still wasn't that great, particularly for the units that will eventually be combined: year-over-year revenue was flat for the Personal Systems Group with a 5.5% operating margin. It declined 10% for the Imaging and Printing Group group with a 13.2% operating margin.

So, if you were HP, which unit would you target for cuts? Given the margins, we agree with this HP employee and predict heads are going roll in the PC group, too.